The construction industry is dynamic and is growing at a very fast pace. The growth in construction industry is measured by its project efficiency and the time taken to complete a project. To stay competitive, construction companies are working hard to provide advanced safety features and coming up with an improved speed of execution. In the construction industry, the most important factor that matters for companies and consumers, both, is attention to detail. It helps construction companies to make the project profitable.
The primary focus is to complete the project on time while also taking care of numerous other departments. In this entire process, accounting takes a backseat. So, how about Construction Accounting software that will help General Contractors organizes their accounts and also keeps a track of the mountainous number of records, transactions, financial activities, and progress of all the on-going projects.
What is Construction Accounting Software?
Construction Accounting Software is an integrated set of tools that helps General Contractors to keep a track of financial data for every project they manage. It is a collection of programs, processes, and information that serves all the essential job operations of general accounting software. Construction management software for builders and contractors is fully-integrated accounting software that can be utilized for every aspect of your construction business operations without duplicating data entry.
Construction Accounting Software can also be considered as a modern business solution to handle all the financial activities in the construction industry. Accounting software for General Contractors comprises several modules to fulfil construction-specific functions such as time and material building, core accounting modules, and consolidated general ledgers.
Construction Accounting Software for General Contractors helps them improve project execution by providing the required information needed to efficiently manage various projects at once. It also helps General Contractors reducing the business vulnerability risks by keeping the project expenses and claims defense costs organizations and enhance accountability by constantly monitoring cash flow.
Construction Accounting Challenges faced by General Contractors:
Decent planning and enthusiasm are all it takes to complete the project. However, handling the financial activities and accounting are some obvious issues that can impact General Contractor’s bottom lines.
Here is a list of a few construction accounting challenges faced by General Contractors:
- Scope Limitations: Projects in the construction industry are subject to change at the last minute. The reasons behind these changes can be any of these, i.e. material availability, workforce availability, building site condition, legal formalities, weather and atmosphere, and several others. Such add-ons or iterations can affect the entire planning of a project.
- Inaccurate Cost Estimates: Inaccurate cost estimation is among the top challenges. The cost estimation entirely depends upon the duration of the project. The material requirements and labor costs may increase in case if the project runs on for months than the scheduled time. Estimating the costs of equipment, material, suppliers and labor costs can be a difficult task given the scheduled time for project completion.
- Lack of Communication: Without having an integrated central database, it is very difficult to manage the project details and information. The communication between the departments and managers will become a daunting task when there is no clear view of the project. This lack of communication within the organization can impact the impression on your client and also affects the project status.
- Payment Release and Manual Tracking: Manual tracking of payments, on-going work processes, and raw materials can be incredibly excruciating and time-consuming. Manual processes can always have high chances of human errors and data loss.
Benefits of Construction Accounting Software:
Construction Accounting Software for General Contractors can help you increase your margin and let you control your project details and information. For a construction organization, investing in Construction Accounting software can be beneficial for General Contractors, Sub-contractors, land developers, homebuilders, and Specialty Contractors.
Here are the benefits of using Construction Accounting software:
- Financial Reporting: Construction accounting software helps you keep a track of all your financial activities from payments, invoices, and everything. No need to go through reams of documents, paperwork, and receipts, you will get all the details in just a few seconds.
- More Profitable Project: Construction Accounting software allows General Contractors to gain complete command and control the project details through the software itself. Tracking, recording, managing time, raw materials, change or replace orders, managing costs, and other several activities of other departments can be exponentially improved.
- Increases Potential Client Confidence: What else could be better than the opportunity to complete or deliver a project on the estimated schedule, so you can impress all your clients and retain them for further projects? Construction accounting software not only helps in creating an impression on your clients but also helps you add credibility to your work.
- Better Information Access: Centralized data collection is a dream come true. It can save up-to-date information about your entire organization which can be easily and immediately accessed by the person involved with it. Immediate access to such information can prevent or settle several types of errors from occurring.
Implementing fully-integrated and automated Accounting software for Construction Contractors helps construction organizations become more efficient and leads to improved profitability.